Main menu

Search form

Unconventional gas boom: more risks, fewer jobs

Anti-fracking protest in the US. Fracking is commonly used in unconventional gas mining. It poses risks to water, food, health a

Global opposition to unconventional gas mining is growing fast. Impacts on water, food, health and the environment, associated seismic risks and climate change contribution are just some of the many reasons.

Meanwhile, the industry is growing. Its potential growth in Australia is enormous, with large known reserves and billions to be made.

Unconventional gas is set to boom in Australia, but the public has been provided with next to no information — what it is, where it is and the plans for its development — from industry or governments. The industry says the risks of unconventional gas are worth it because it will bring more jobs and economic growth — but the claim does not stand scrutiny.

Unconventional gas is found in rocks of low permeability, which means the gas does not flow freely in the rock or out through a gas well. This makes it more difficult to extract.

By comparison, conventional gas is found in linked porous reservoirs that are highly permeable. This allows the gas to flow freely in the rock or out through a gas well, making it easy to extract.

In economic terms, the main difference between unconventional and conventional gas is the method, ease and costs of getting it out. Unconventional sources require different technology and more investment than the conventional industry to harvest the gas.

The development of new technologies — in particular, a combination of horizontal drilling and hydraulic fracturing (fracking) — have made unconventional gas commercially viable.

Eastern Australia has large CSG reserves — the CSIRO estimates about 250 trillion cubic feet, or enough to power a city of 1 million people for 5000 years. These are held in the Bowen and Surat basins in Queensland, and in the Gunnedah, Clarence-Moreton, Sydney and Gloucester basins in New South Wales.

This also applies to shale and tight gas reserves — exploration of which is still largely in its infancy. An August 2011 Norton Rose Report outlined current shale gas development in Australia. It said: “There have been very few exploration wells drilled, no appraisal programs conducted, and no commercial production.” However, shale and tight gas reserves, which usually require fracking, are increasingly being targeted.

Shale exploration projects are also proposed over 118,814 square kilometres around Arnhem Land in the Northern Territory. A March 2011 ASX announcement by Armour Energy claims the area is “prospective for large shale gas resources which are expected to be comparable to or rival shale gas resources contained within known shale gas basins in the USA”.

The report said the mining boom’s impact on the exchange rate has damaged other parts of the economy: “While mining exports have increased by around 5% of GDP over the period since the beginning of the mining boom, non-mining exports have declined by around 5% of GDP over the same period.”

The high Australian dollar means exports from non-mining sectors — particularly tourism, manufacturing, education and agriculture — are suffering.

As mining displaces other sectors of the economy, it also displaces jobs. Because it is far less labour-intensive than manufacturing, tourism and education, it is likely to displace far more jobs than it creates.

Frank Gelber, director of economic consultants BIS Shrapnel, told The Age on March 27 that the mining boom is destroying other sectors of the economy: “We’re burning our bridges. We are losing the skills, the equipment and the markets. When the Australian dollar collapses, we won’t have the industries any more. We will have to go through a total reversal of the process of structural change we are seeing now. We will see a big drop in our standard of living.”

He also predicts that the boom will be over within 15 years, because mining investment in infrastructure — which rose from 1% of GDP to 4.4% last year — and not mining itself, is driving economic growth.

A report commissioned by CSG company Santos on the economic impacts of developing its proposed CSG operations in northwest NSW said the project will create 200 direct jobs.

However, an examination of the report by The Australia Institute found “gas exports from the development will ‘crowd out’ $646 million in other exports by driving the value of the Australian dollar higher”. It said the loss of these exports from other sectors “is likely to cause the loss of 5770 jobs in the non-mining industries”.

The unconventional gas industry may bring some new jobs and investment, but it will displace more jobs than it creates and stifle investment across other sectors; sectors that will remain decimated when the boom turns to bust.

Sections

General

Sites

In these days of growing media concentration, Green Left Weekly is a proudly independent voice committed to human and civil rights, global peace and environmental sustainability, democracy and equality. By printing the news and ideas the mainstream media won't, Green Left Weekly exposes the lies and distortions of the power brokers and helps us to better understand the world around us.